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Labor experts optimistic mediators will broker PMA-ILWU deal

Below please find the latest on the West Coast ILWU / PMA negotiations as told from this AM’s JOC. Although a deal should be reached, some say not so fast. The situation now has bubbled over to the East Coast vessels. There are thousands of containers back-logged in origin and transit ports awaiting space to over booked East Coast vessels. Some vessels are 100-200% overbooked right now. Some carriers are not taking any bookings until the end of January. Cnees are willing to get space “at any cost” right now from what we are being told from various sources.

WWL is working diligently to maintain and grow our space allocation on these vessels and attempting to control the costs in this “ crisis laden atmosphere “. Many of us, with decades of experience in the industry, have never seen anything like this. So far so good however regarding the WWL space right now, but as we get further into the very busy Pre-Chinese New Year Rush, the situation for sure, will not get any better.

Subject: Labor experts optimistic mediators will broker PMA-ILWU deal

Don’t expect any immediate negotiation breakthroughs when federal mediators wade into negotiations between the U.S. West Coast longshore union and waterfront employers, but a deal will likely be reached, according to two experts on labor negotiations.

“This is a sign of the union saying, ‘We want to be reasonable. We want to see if we can get an outside party to help us reach a middle ground,’ ” Steve Cabot, a veteran labor management-related expert and chairman of the Cabot Institute for Labor Relations, told JOC.com on Tuesday.

There also might be an element of public relations in the International Longshore and Warehouse Union’s agreeing to the Federal Mediation and Conciliation Service assuming a formal role in their stalled negotiations with the Pacific Maritime Association, said Cabot, who has represented employers in labor talks for nearly 50 years. If a deal can’t be worked out, the union can at least say it agreed to involve a third-party so the blame doesn’t fall entirely on their shoulders, he said. Still, he believes the ILWU’s desire to reach a deal is the real driver of its decision to invite the FMCS.

Shippers welcomed the ILWU’s decision this week to agree to mediation after a few weeks of thinking about it — West Coast waterfront employers made the request on Dec. 22 — seeing it as a potential breakthrough in negotiations that have lasted eight months and wreaked havoc on ocean container supply chains. The PMA said ILWU slowdowns are exacerbating congestion at all major U.S. ports. The union rejects the accusations, blaming carriers for the chassis dislocation that is among several factors causing the congestion.

Michael Belzer, an expert on U.S. labor and an associate professor of economics at Wayne State University, is also optimistic that federal mediators will help the two sides reach a deal. He said both sides are strong and knowledgeable, increasing the likelihood they’ll be able to trade concessions and ultimately reach a deal. If both sides are not equally balanced in their bargaining power and aptitude, the stronger side generally tries to force a solution, leading to “all-out” conflict, Belzer told JOC.com.

“That is why a power balance is such a good thing. It gives both sides an opportunity to duke it out mano a mano and choose what they will trade on,” he said.

Both sides also have much to lose if they don’t stay at the table and work out a deal, Cabot said. For example, if employers declared an impasse and implemented their last offer to the union, that would equate to waging outright war on the ILWU, a scenario the PMA is strongly looking to avoid, he believes.

The ILWU isn’t looking for an all-out confrontation either, as a lockout or strike could spur more shippers to permanently reroute cargo away from the West Coast, costing them work hours, and could, in the extreme case, provoke a political backlash in Washington.

Even so, shippers watching from the sidelines shouldn’t expect federal mediators to save the day in short order. Federal mediation is a slow process involving the team — to be headed by senior mediator Deputy Director Scot Beckenbaugh — shuttling going back and forth between the two sides to determine the bargaining range, Belzer said.

“These federal mediators are very disciplined,” Belzer said. “They are not trying to outsmart one side or force a solution. They will work both sides to see the places where solutions could be found,” he said.

Although the FMCS has had a success record of between 84 percent and 87 percent during the last decade, mediators’ ability to get both sides to a deal is 47 percent when the contract covered more than 1,000 workers. There are nearly 14,000 ILWU members.

And there have been some conspicuous failures in recent years, said Jock O’Connnell, an international trade economist.

The FMCS was unable to negotiate an agreement between the National Football League and the players’ union in 2011, and in negotiations between the National Hockey League and the players’ union in 2012. Even when the FMCS helps parties reach a deal, it can take a long time, as in the case of the NFL and its referee’s union taking four months of federal mediation aid before ending the lockout.

With disagreements over the jurisdiction of chassis maintenance and repair being a key obstacle to reaching a deal, the FMCS will be particularly challenged because the International Association of Machinists, which has historically performed that work at some terminals, won’t be at the table. Shipping lines have sold most of their chassis to equipment leasing companies, which are not PMA members, meaning they can’t bargain with something they don’t control.

“There is some hope (among the industry) that (the FMCS) will come in and get this wrapped up in a week so the ports can get back to some semblance of normalcy,” O’Connnell said. “It’s a legitimate hope. But that’s what it is — hope.”